Saturday, May 09, 2020

The Crisis is the Official Panic

The big national crises in recent memory are the 2001 9-11 attacks, the 2008 mortgage derivative crash, and the 2020 Wuhan virus. What do these have in common?

In each case, about 99% of the damage was caused by govt do-gooders who overreacted to some relatively minor adverse news.

The 2001 attack was the most audacious terrorist attack anyone had ever seen, but it only killed about 3k people, and did a couple of billion dollars in property damage. Had we just cleaned up the rubble and done nothing else, we would have been a lot better off. There was no big wave of terrorist attacks or anything else to worry about.

Instead we spent many trillions on foolish wars, created the TSA to hassle everyone at airports, and imported millions of Moslems. These were far more damaging.

The 2008 crash bankrupted some investment bankers who made bad investments in mortgage securities, but did not have a direct negative effect on anyone else. Those who owned homes saw some fluctuations in appraised values, but longterm owners saw no adverse effects. Some people speculated on houses with no money down and dishonestly exaggerating their income. Some of them lost their houses in foreclosures, but it was the banks who closed their eyes to the obvious fraud who absorbed the loss. The govt spent 100s of billions bailing out the firms who made foolish investments. We would have been better off if those firms were bankrupted.

Now the 2020 pandemic has a death toll that is comparable to a bad flu season. It is the lockdowns, not the deaths, that are causing many trillions of dollars in losses. The lockdowns are probably not even saving any lives.

In each of these crises, we were subjected to supposed experts giving silly opinions on CNN and in the NY Times. It should have been obvious that these experts did not know what they were talking about. Their policy proposals did not even have any serious analysis showing benefits would exceed the costs.

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